Arla, which told employees earlier today (Monday), said proposals to close the creamery were not linked to issues over the last several months with odours coming from the factory in Sowarth Industrial Estate.

An Arla spokesperson said: “The proposed closure of Settle is not related to the effluent plant odour issue.

“Arla has ambitions to continue its growth to support UK manufacturing and the future of British dairy.

“Unfortunately, we are limited by the site footprint available in Settle, so we are proposing to close this site and to reinvest into Lockerbie, which has the available space and buildings.”

Arla, which employs 128 people at its Settle Creamery, says it plans to invest nearly £90m into its Lockerbie site to ‘support the farmer owned cooperative’s future growth ambitions’.

The UK’s largest dairy co-operative is proposing to create a ‘centre of excellence’ at Lockerbie for the production of UHT and Lacto-free milk.

The plan will see the creation of new jobs in the area, but will mean the closure of the Settle site. Also proposed is the moving of some operations from Stourton, Leeds, to Lockerbie. 

If it goes ahead, proposals at the Settle creamery, which produces UHT and lacto-free milk, will take place ‘from the second half of 2026’.

Skipton MP Sir Julian Smith, who has been working with residents and Arla to solve odour issues at the site, said he would help in any way that he could.

“It is very bad news from Arla regarding its Settle site. I have spoken to Cllr David Staveley (North Yorkshire Council’s division member for Settle) and I have asked North Yorkshire Council to engage rapidly to provide support. I stand ready to help in any way I can.”

Deanne Ferguson, of the General and Municipal Worker Union (GMB),  said: “If Arla’s proposal to close goes ahead, it will be a devastating blow for the dedicated workers at Settle and for the local community which relies on this key employer.

“It will have a significant economic and social impact. 

“GMB will stand side by side with members to make sure they are fully supported throughout this difficult period.

“We will now begin urgent discussions with Arla to explore all possible options to protect jobs.

“We call Arla and all stakeholders to engage in full and transparent discussions about the future of the workforce and to consider all available alternatives to compulsory redundancies.” 

Fran Ball, vice president of production at Arla Foods, said: “The proposals announced today form part of our strategy to strengthen our manufacturing network and future-proof dairy production in the UK, and whilst this is an exciting announcement for Lockerbie our priority right now is to support our Yorkshire colleagues.

“At Arla we are committed to supporting everyone through periods of change and we understand that this will be a time of uncertainty for colleagues who work across our Yorkshire sites.

“We will be entering into a period of consultation with everyone affected by these proposals, announced today.”

Today’s news follows the announcement of Arla’s 2024 annual results, which saw the dairy cooperative confirm it made record investments of more than one billion Euros globally in 2024.

The investments included over £300 million across Arla’s UK sites, including £179 million in state-of-the-art technology at its Taw Valley creamery in Devon, which will allow the business to create mozzarella in the UK.

Bas Padberg, managing director of Arla Foods UK, said: “The proposed investment into Lockerbie showcases our commitment to driving change in the UK, and supporting the future of British dairy. “There is an increasing focus on the role the UK food industry plays in helping to tackle the health crisis and provide good food to nourish a growing population.

“We are aware that this proposal has the potential to impact colleagues across some of our UK sites, and our priority is to support them through this challenging time.”

Arla Foods UK board director, and Arla farmer, Arthur Fearnall, said: “We are incredibly proud to see this significant investment proposed for Arla’s Lockerbie site.

“We’re excited to see how this progresses over the coming years as we continue to work together to ensure all Arla farmer owners receive the best price for their milk.”

The Arla spokesperson added: “This Stourton proposal means we are suggesting to move the production for one of our customer lines from Stourton to Lockerbie.

“We do not envisage any redundancies at Stourton and expect colleagues to be redeployed into equivalent roles at site. We will commence collective consultations on or before March 13 with colleagues at Settle to fully review proposals and all options.”